The election circus
Whether the party you support won or lost, election time reminds us of how lucky we are to live in a country like Australia. For all its “messiness”, imperfections and occasional frustrations, our vibrant democracy and our freedom to choose our leaders in a peaceful and rational way is a precious right indeed.
We have extended our congratulations as an organisation to Prime Minister Gillard on her victory in the recent election. But now that the campaign is over, and democracy has had its say, it is time for the new Government to “get down to business” and start seriously addressing some important issues for directors and the business community.
Before setting out some of those issues, I have to say that in many ways the recent campaign was a disappointing one for business, particularly in the way in which it was covered by the media.
In my view, although the parties put forward a lot of policy proposals, the election coverage put too little focus on solid policy and too much on peripheral political issues.
We weren’t told enough about the parties’ vision of how Australia can be made a more efficient, productive and prosperous nation – and the role of business in that – and not enough attention was given to the bold agenda for the reform necessary to achieve that aim.
Nowhere was it recognised that it is axiomatic that government does not create wealth, it can only tax it. In the end, it is private sector business that generates the income that pays the taxes and it follows that businesses must be successful if governments are to be able to raise the revenue to deliver on election promises on things like health, schools, infrastructure and reducing the deficit.
The media was inadequate in presenting and properly analysing the parties’ policies, preferring to focus on the political “circus” of the campaign. As one observer put it, modern political reporting now seems to be more about entertainment than serious analysis of the issues that really matter. This is bad for Australia, as it denies voters the information necessary to allow them to make up their minds in a sensible way.
When political debate reaches such a shallow level, encouraged by the media, it is an insult to the intelligence of the electorate, inimical to good policy and a triumph of short-term, poll-driven politics over the national interest. It is also bad for business, because it undermines the achievement of necessary economic reform.
However, now that the election campaign circus has packed up for another three years, the new government hopefully has the opportunity to refocus on serious policy. It is an opportunity to rethink not only the way government approaches some key issues but how it conducts its relationship with business.
Just before the election, the Australian Institute of Company Directors sent an Open Letter to leaders, ministers and shadow ministers on all sides of politics, focusing on some key issues of fundamental interest to Australia’s 2.1 million directors, especially in the areas of director liability and business regulation.
It also put forward ideas about the way government interacts with business, not just in terms of consultation on policy and legislation but in innovative ways of bringing the knowledge and experience of business, and the business community’s concerns, to the policy process.
We did this because we believe it is important that whichever party is in government understands clearly the key issues that are of concern to directors.
Importantly, it should understand the importance of imposing a rigorous system of structural reform of business regulation. It is crucial that the Federal Government – and, indeed, all governments around the country – address the fundamental problem of the sheer weight of legislation and existing regulation affecting business and come up with genuine reforms to deal with it.
Stemming this continual growth in new regulation, and actually cutting back on the huge accumulation of existing red tape, is crucial for improved economic performance and a key element of the agenda for boosting national productivity.
The processes that create new regulations must ensure they are genuinely needed and are as efficient as possible. And, it is vital that existing red tape is frequently reviewed, rigorously assessed and vigorously pruned back as necessary.
The Government should also ensure appropriate consultation with business when formulating new policy or finalising legislation. There should, as much as possible, be consultation ahead of measures being announced as firm policy, to ensure unintended consequences and practical problems can be identified early and dealt with.
In addition, the Government should consider ways to ensure a better understanding of business issues and concerns among politicians and their advisers.
The Australian Institute of Company Directors is, of course, a non-partisan organisation and we put forward our Open Letter in that spirit. We did not single out one side or the other for criticism or support.
Indeed, both sides need to improve in this regard.
John H C Colvin
FAICD
CEO, Australian Institute of Company Directors